A Newsletter from the Georgia Insurance and Safety Fire Commissioner May 2006 Commissioner's 18,500 Consumers Helped Corner So Far in 2006; Hurricane season starts June 1, and I want to remind Georgians that they should check their insurance policies annually to be sure they have adequate coverage. Our coastal residents face the most danger if a hurricane strikes, and the only way to ensure their safety is to evacuate. However, even citizens who don't live on the coast may still face the hazards of strong winds, heavy rain and inland flooding. To protect your home and other property from the financial impact of destructive storms, a homeowners policy tailored to your particular needs is your best option. I also suggested that homeowners discuss their insurance needs with their insurance agent. Renters too should consider a policy to cover their personal belongings; the landlord's policy generally will not cover the loss of a tenant's possessions. Corner Continued Pg. 2 $9.3 Million in Insurance Claims Recovered In the first quarter of 2006, Commissioner Oxendine's Consumer Services and Managed Care Divisions helped more than 18,500 Georgia consumers settle disputes with their insurance companies, returning $9,312,721 in insurance claims to these consumers - money they might not have received without his help. "Investigators in our Consumer Services and Managed Care Divisions work every day to help Georgians, both individual citizens and businesses." "Investigators in our Consumer Services and Managed Care Divisions work every day to help Georgians, both individual citizens and businesses," Oxendine said. "Whether the consumer has a claims dispute or simply a question about insurance, our representatives can provide invaluable expert advice." "Our office takes calls Monday through Friday from 8 a.m. to 7 p.m., so we can offer the convenience of assisting consumers by phone after traditional working hours," Oxendine added. Specialists in Oxendine's Consumer Services Division can help with problems in life, health, auto and homeowners insurance. Consumers can call even if they just want their insurance policy explained or reviewed. -IF John W. Oxendine, Georgia Insurance and Safety Fire Commissioner 2 Martin Luther King, Jr. Dr., Atlanta, Georgia 30334 404-656-2056 www.gainsurance.org inscomm@mail.oci.state.ga.us Agents Licensing, 404-656-2100 Consumer Services, 404-656-2070, 1-800-656-2298 Industrial Loan Division, 404-656-2078 Regulatory Services, 404-656-2074 Arson Hotline, 1-800-282-5804 Fraud Hotline, 1-800-726-6070 Jason M. Shepherd, INSURANCE FACTS Editor, 404-651-8719 Jason.Shepherd@mail.oci.state.ga.us INSURANCE FACTS is published monthly by the Georgia Department of Insurance. MAY 2006 INSURANCE FACTS Page 1 of 4 CORNER Continued Business owners should consider business interruption coverage, as well as having a policy to cover the physical assets of a business. After Katrina we saw many businesses that were unprepared for the weeks or months it would take to get back up and running. One important factor to consider is whether you want actual cash value coverage or replacement cost coverage. With actual cash value, you will receive only the current value of an item when you file a claim. In other words, you'll get only "used" prices for your furniture, TV, etc. With replacement cost coverage, your claim amount will be enough to purchase new items. It is very important to plan ahead. A flood insurance policy will not go into effect until 30 days after you buy the policy. You can obtain more information about flood insurance at the NFIP Web site at www.fema.gov/nfip. Hurricane season is June 1 through November 30, with September the month when the powerful storms are statistically most likely to occur. Anyone with questions about homeowners, flood, or other types of insurance can call the Commissioner's Consumer Services Division at 1-800-6562298. Phone lines are open from 8 a.m. to 7 p.m. Monday through Friday. -IF Also, remember that a standard homeowners' policy does not cover damage from flooding. Policies for mobile or manufactured homes may include coverage for flood damage; owners of traditional site-built homes can purchase federal flood coverage in addition to their regular coverage. Flood damage to automobiles is covered under the comprehensive portion of an auto policy. Commissioner Honors Bradlaw for Service Purchasing flood insurance is an important consideration for Georgia consumers, even if you think a flood is unlikely in your area. Between 20 and 25 percent of flood claims occur in medium or low-risk flood areas. Flood coverage is a special policy that is federally backed by the National Flood Insurance Program. You may buy flood insurance that covers up to $250,000 for flood damage to your home. A standard flood policy will cover structural damage to your home, including damage to your furnace, water heater, air conditioner, floor surfaces (carpeting and tile) as well as debris clean up. You can buy NFIP flood insurance directly from your property and casualty insurance agent or insurance company, if your community participates in the NFIP. You can find out if your community participates by visiting the following NFIP Web link: http://www.fema.gov/fema/csb.shtmask. Your insurance agent or insurance company also can confirm whether flood insurance is available to you and what it would cost. You can buy flood insurance for your home or business regardless of whether the property is in or out of a floodplain, as long as the property is located in a participating community. Commissioner Oxendine announced the retirement of Harry Bradlaw, a 10 year employee of the Department of Insurance and 50 year veteran of the insurance industry. Bradlaw came to work with the State Insurance Commissioner's Office in May of 1996 in the Life and Health Division as an Actuarial Analyst and retired on April 30th as a Marketing and Rate Analyst. Commissioner Oxendine marked Bradlaw's half century of service to the insurance industry with a proclamation. -IF MAY 2006 INSURANCE FACTS Page 2 of 4 Georgia's Best Health Care Close to Home...For all Georigans Imagine that you require a pediatric specialist for your eightyear-old daughter's chronic condition, but the closest specialist is four and a half hours away from your home one way. Round trip, that's more than eight hours an entire day's work for most people, and an entire day out of school for your daughter. For Sadie Lewis and her daughter Tamera, this has been the routine for most of Tamera's young life. Not willing to compromise Tamera's health, Sadie travels hundreds of miles from home to ensure her daughter receives the care she needs. However, last month Tamera's check-up was different. Even though she was being treated by her pediatric specialist at the Medical College of Georgia's Children's Hospital in Augusta, Tamera was sitting at her hometown hospital, Coffee Regional Medical Center, in Douglas, Georgia. Thanks to the Georgia Rural Health Initiative announced by my office in March 2005, Tamera and her mom were interacting with her doctor in Augusta in real time, via high-speed telecommunications technology and specialized medical cameras, without having to miss a day of school or work. This scenario, made possible by telemedicine represents the future for millions of Georgians living in rural communities. Telemedicine uses the latest advances in medical and information technology to allow patients and their family doctors to consult with specialists at distant locations. Georgia's initiative, the largest rollout of a telemedicine network in the country, will provide all 8.8 million Georgia citizens access to the highest-quality specialty health care possible, without the need to travel across the state to get it. In fact, by the end of this year, our new network will ensure every Georgian is less than 30 miles from a telemedicine site, allowing them convenient access to the state's top health care specialists specialists who are traditionally found in the larger metropolitan areas such as Atlanta, Savannah, Augusta and Macon. Once Georgia's telemedicine network has been fully implemented, there will be 36 telemedicine sites at rural clinics and hospitals, such as Ty Cobb Memorial in Royston and Crisp Regional in Cordele; and four specialty care sites: Emory Healthcare and Piedmont Hospital in Atlanta, the Medical College of Georgia in Augusta and Memorial Health University Medical Center in Savannah. Through a unique partnership between my office and Blue Cross Blue Shield of Georgia, citizens throughout Georgia can now look forward to receiving the same quality care available in urban areas. Blue Cross Blue Shield of Georgia and its parent company, WellPoint, Inc., committed $11.5 million over three-years to provide the telemedicine equipment and necessary training to support the Georgia Rural Health Initiative. In addition to Georgia's telemedicine program, my office is also launching a pilot teleradiology program for that will allow rural hospitals increased access to radiologists. Currently, many rural hospitals must transport diagnostic film, such as x-rays, 30 miles or more to the nearest health care facility with a radiologist on duty who can read the film and provide an expert diagnosis. Valuable time is lost transporting the film - time that should be used to diagnose and treat the patient. Our pilot teleradiology program will equip certain rural health care facilities with the technology and training needed to transfer diagnostic images digitally to radiologists anywhere in the world instantaneously, enabling quicker diagnosis and treatment. The pilot program will kick off at Louis Smith Memorial in Lakeland on April 3, and our hope is that by the end of 2006, four hospitals will be utilizing teleradiology, further increasing health care access and enhancing the quality of care for all Georgians. After all, the health care of each and every citizen of Georgia is important and should not be compromised due to where someone chooses to live. Through Georgia's telemedicine and teleradiology initiatives, we are taking steps to help ensure all Georgians have convenient access to the best providers and modern health care advancements this state has to offer. -IF MAY 2006 INSURANCE FACTS Page 3 of 4 Insurance: A Vital Form of Financial Security at Every Life Stage Insurance provides a vital form of financial security at every life stage. However, many consumers lack sufficient knowledge about insurance issues. Recently, the National Association of Insurance Commissioners (NAIC) of which my office is a longstanding member surveyed consumers in four distinct life stages about their views on a wide range of insurance matters. Some of the findings were quite alarming! For example, 20 percent of young singles say they would let their auto insurance policies lapse to save money. Mind you, auto insurance is mandated by law and of crucial importance to drivers and their passengers as well as everyone else on the road! In addition, 18 percent of young singles said they would decline employer health insurance to save money. Scary, isn't it, that nearly a fifth of our young people are so shortsighted about the immense impact that health costs could have on their lives. As for young families, fewer than half have life insurance purchased on their own for either spouse. These are families with a child or children under the age of five who do not own any insurance. Even though some may have employer-provided insurance, that benefit often goes away when they change jobs or become unemployed. More than half of established families households with older children and greater assets to protect did not understand the terms of health insurance continuation under COBRA, the federal law that enables individuals to con- tinue their employer-provided health coverage if their employment ends. Among empty nesters and seniors despite the well documented increase in lifespan only 12 percent think they are very likely to need long-term care. That percent is in stark contrast to publicly available data that indicate that about 60 percent of Americans who reach age 65 are likely to need long-term care. Finally, among all groups there's a need for greater awareness about the issue of fake insurance. Fake insurance policies and phony health discount cards that defraud the public are sold by unlicensed companies. The facts are alarming: in the area of health insurance alone, the General Accounting Office of the federal government identified 144 fake insurers nationwide that sold bogus policies to more than 200,000 policyholders between the years 2000-2002, resulting in more than $252 million in unpaid claims. Of concern is that in the survey, only 45 percent of consumers overall indicate that they get suspicious about the number one warning sign associated with fake insurance: a policy that costs significantly less (i.e. 15-20 percent less) than other policies with comparable coverage. To address these consumer information needs as well as many others my office and the NAIC, has embarked on a comprehensive, multi-media public education initiative. Under the theme, Insure U Get Smart About Insurance, we have cre- ated a virtual "university curriculum" of helpful information. The heart of Insure U is our online educational curriculum available at www.gainsurance.org. It includes an introduction to the four basic types of insurance auto, home health and life as well as helpful life stage considerations for each consumer segment. Together, our Insure U public education elements the online curriculum, public service announcements and community presentations will go a long way toward helping Americans Get Smart About Insurance and protect themselves from the perils of fraudulent insurance policies and fake insurance companies. However, the quickest way for anyone to get unbiased information and answers about insurance matters is to contact our office at 800-656-2298. We're there to protect the consumers of Georgia and to help them understand how insurance fits into their lives. -IF Latest Insurance Figures from Recent Severe Weather Insured losses from tornadoes and violent weather that struck several North Georgia counties on Saturday, April 8, are estimated at $25 million. The storms have generated more than 3000 claims. Insurance companies are asked to give prompt assistance and claims handling for storm victims. -IF MAY 2006 INSURANCE FACTS Page 4 of 4 Actions Against Agents Note: The actions listed below reflect cases that have been finalized and are currently closed in the Enforcement Division of the Insurance Commissioner's Office. Each case is determined on a case-by-case basis. Corpman, Kareema A. (2005-1976) McComb, James R. (2006-005) Lilburn, GA 30047 Columbia, SC 29205 Ms.CorpmanagreedtohaveherGeorgiaresi- Mr.McCombagreedtohavehisGeorgianondentlimitedsubagentlicenseissuedonapro- residentlicenseissuedonaprobationarystatus bationarystatusforaperiodofthreeyears. foraperiodof12months. Commissioner Directs Life Insurers Not to Penalize Travelers to Israel Commissioner Oxendine issued a directive in February to life insurance companies informing them that rejecting coverage to individuals based solely on their past or future travel is considered an unfair trade practice under existing Georgia law. Courtney, Jason Dean (2005-629) Avon, IN 46123 Mr. Courtney agreed to have his nonresident insurance agent license issued on a probationary status for a period of 12 months. Hoffman, Michaelyn (2006-322) Post Thomasville, GA 31758 Ms. Hoffman agreed to have her Georgia temporary resident license issued on a probationary status for a period of 12 months. Holmes, Dewey (2006-064) Douglasville, GA 30135 Mr. Holmes agreed to pay a fine in the amount of $300. Rooker, Natasha (2006-065) East Ellijay, GA 30539 Ms. Rooker agreed to have her Georgia resident license issued on a probationary status for a period of 12 months. Shapiro, Edward D. (2005-850) San Francisco, CA 94105-2809 Mr. Shapiro agreed to have his Georgia nonresident insurance agent license issued on a probationary status for a period of three years. Wigley, Heather (2006-071) Ft. Oglethorpe, GA 30742 Ms. Wigley agreed to have her Georgia temporary resident license issued on a probationary status for a period of 24 months. -IF "The issue came up when members of the Anti-Defamation League had applications for life insurance rejected," said Commissioner Oxendine. "Simply because they indicated they planned to travel to Israel at some point in the future." Oxendine said his directive quotes from the section of the Georgia law dealing with unfair trade practices, and states that "This statute is applicable to all underwriting for life insurance, including that based on an applicant's past travel experiences or future travel plans." The directive, 06-L&H-2, has been sent to all companies licensed to sell life insurance in Georgia -IF Commissioner Encourages Agents to Look Out for Unlicensed Healthcare Plans Insurance agents are encouraged to remain alert to operations of illegal health plans. Georgia's insurance agents are the best defense for consumers targeted by these scams. Agents should contact the Georgia Department of Insurance's Fraud Division regarding any suspicious health plan product. Unfortunately, these plans continue to operate nationally. Some have made sales in Georgia. Georgia insurance agents have been solicited to market ille- gal health plans. On other occasions, agents discover that a client has been offered such a plan by another agent, through an association, or over the internet. Know the warning signs and contact the department immediately. The Insurance Department urges you to promptly report any suspect plan to protect consumers and to preserve your professional standing. -IF MAY 2006 INSURANCE FACTS Page 5 of 4